Boost Your State Pension with Voluntary National Insurance Contributions

Boost Your State Pension with Voluntary National Insurance Contributions

As we approach retirement, ensuring a comfortable financial future becomes a top priority. The state pension, a crucial source of retirement income, is dependent on the number of qualifying years of National Insurance (NI) contributions you have made. While gaps in your NI record can diminish your state pension entitlement, there’s a solution: voluntary NI contributions.

To receive the full state pension, you need 35 qualifying years of NI contributions. These years typically accumulate as you work, with contributions automatically deducted from your salary. However, there may be instances where you may not have earned enough to make mandatory NI contributions, leading to gaps in your record.

How To Make Voluntary National Insurance Contributions

  • Request a NI record statement/Pension Forecast — check your NI record to identify any gaps. You can request a statement, check your State Pension Forecast online through GOV.UK here, or contact the National Insurance helpline on 0300 200 3500.
  • Calculate the cost — determine the number of qualifying years you need and the corresponding cost.
  • Choose your payment method — you can pay online through GOV.UK, set up a direct debit, or make a manual payment. You must obtain the correct 18-digit reference from HMRC to make these payments so they are allocated correctly.
  • Make the payments — settle the outstanding contributions to fill the gaps in your NI record.
  • Monitor your progress — regularly check your NI record to ensure the contributions have been correctly applied.

Voluntary NI contributions can significantly boost your state pension. For instance, making contributions for one qualifying year could increase your state pension by approximately £2.40 each week, which could be worth around £124.80 extra every year. Learn more about boosting your state pension by plugging gaps in your National Insurance here.

You now have until 5th April 2025 to get the payment references and pay HMRC the amounts to plug the gaps.

Registering as Self-Employed in the NI System

What we have also found is that many self-employed people are not properly registered within the National Insurance system. It is imperative that anyone who has been self-employed at any time since the 2016/17 tax year checks that they have been registered as self-employed in the National Insurance system.

Help from Taxfile When You Need It

If you need help with any tax, National Insurance or accountancy-related issue, Taxfile’s experts are here to help. We’ll be happy to give you an idea of costs before you commit too, and there’s no pressure whatsoever. We are accountants and tax advisors in Tulse Hill, South London (SE21). We help individuals, the self-employed, sole traders, limited companies and just about anyone who needs tax or accounting help. Contact us, without obligation:

With offices in Tulse Hill and Dulwich, we may also suit those living or working in Balham, Brixton, Clapham, Croydon, Forest Hill, Herne Hill, Lambeth, Southwark, Stockwell, Wandsworth and West Norwood. Our Devon office serves businesses and individuals in Devon and Cornwall in the Southwest of England.